"GIGANTIC LOSSES"

Evening Post, Volume CXI, Issue 19, 23 January 1926, Page 7

"GIGANTIC LOSSES"

BAD YEAR FOR SHIPPING

LORD INCHCAPE ON THE

SITUATION

THE P. AND O. MEETING.

(From Our Own Correspondent.) LONDON, 11th December. The past year has been the worst which shipping has ever experienced, said Viscount Incheape, presiding at the Both annual meeting of the shareholders of the Peninsular and Oriental Steam Navigation Company. The results of most voyages, he said, owing to high running costs, heavy dock and labour charges, shortage of cargo, and low rates of freights, had been disastrous, while the troubles in China and the unauthorised strike of seamen and firemen in Australia and South Africa had inflicted on the P. and 0., as on many other shipowners, gigantic losses.

Lord Inehcape had indicated a year ago that unless tilings improved they might be obliged to reduce the dividend, and this had proved to be the case. In paying the interim dividend of 6 per cent, they had fully expected to give a final dividend at the same rate, but despite the efforts of thuir Economy Committee and the loyal help of their staff the year's result, coupled with the losses of the firut three months of the new financial year, had compelled the reduction of the final dividend to i per cent., making 10 per cent, for the year. This they hud been enabled to do only through their investments and their reserves, built up in better times. Ho could hold out little hope of a higher dividend for the current financial year. The P. and 0. Company was, however, sound, and he thought, despite passing adversities, it would remain so.

Discussing the position of the shipping industry generally, he said that there were st the moment far more ships in the world than trade required, millionf of tons were laid up, and few of the shipß in commission were earning sufficient to cover working expenses. He proceeded: "It does seeln to be contrary to all sound economies that Government should, under the Trade Facilities Act, advance money to build more ships, the completion of which cannot fail to aggravate the disastrous condition of the shipping industry, in which millions of the people's savings are invested. All of us who are interested in shipping cannot but applaud the refusal of the Prime Minister to subsidise shipbuilding at the present time." Eeferring to the suggestion that all old ships should be disposed of and that a contribution from the taxpayer should be made to provide new ships, he said: "This is an excellent idea so far as some shipowners* are concerned, but what about the taxpayer, who would have to foot the bill? To my mind the suggestion is absurd, but the Chancellor of the Exchequer may think differently, although I doubt it. " TRADE ADVERSITIES AND THE REMEDIES. Heavy production costs were placing this country at a great disadvantage in the world's markets, and while present conditions continued there would be but little hope of regaining trade outlets which we had lost or of finding new ones. The excess over imports of our visible exports and the shrinkage of our invisible exports were a grave menace to the country's solvency. Adverse trade balances would, if continued, damage our national credit and, by raising prices, reduce the value of ■wages. The Peace Pact, so ably negotiated by Sir Austen Chamberlain, would in time assuredly help the position; but, meanwhile, increased output, economy in production costs, and reduced taxation seemed to him to be the only remedies. . TAXATION AND TRADE i DISPUTES. Although the Chancellor was making every effort to reduce public expenditure, large sums which would ordinarily remain with industry as reproductive capital were being taken from the taxpayer,'often for unproductive purposes. There was a general cry for economy; but, as Mr. Churchill had said, when it came to touching the pockets of the individual Voters, the members of the threatened constituency were up in arms. , The abolition of. submarines, if it would be brought about by international agreement, would effect a material saving in the country's expenditure. He would remind them that put of a total loss by the P. and O. and associated lines of 504,316 tons * of shipping in the war, 400,000 tons yrtte destroyed by enemy submarines.

There was no end to the extravagance of some of the municipal authorities, while Labour leaders, with one or two exceptions, were pursuing courses which tended to paralyse trade and throw their fellow countrymen on to the demoralising dole. In the recent attempt to band the trade •unions together, an attempt which, thanks to the good sense of a number of the union chiefs, had not, bo far, materialised, there was a latent threat to hold tho public to ransdm at any cost in order to obtain a decision against employers. One leader had said the slogan of his disciples must be:—

J.'Not a cent off the pay, Not a minute more a day."

Some of the union leaders, he said, appreciated the economic situation as to wages, working hours, and output. Others did not. _ The latter refused to recognise that industry could not indefinitely be carried on at a loss, and that, without a margin sufficient to ] cover working expenses, industries must close down, unemployment bo j increased, and further burdens thrown on the national and municipal exchequers. One extremist had publicly said: "To hell with the Empire.." They could afford to regard such an outburst as a characteristic expression of Communist mentality, lint when Communists further proceeded to advocate sedition, it was satisfactory to learn that they had been punished for the offence against the law. He believed that not 10 per cent, of the seamen and firemen who recently refused duty and broke their agreement in Australia, New Zealand, and South Africa liad their hearts in tho strike, into which they were intimidated by avowed ,o'omuiunists. it T/as significant that only vessels under the British flag were involved, while foreign vessels were left alone. 1 ' During the year under review, thcro lad been 434 ships in commission; cari«s ci^^^Ji^^i4 : -t9JUiJ^

tance traversed, 16,454,430 sea miles; the port entries had numbered 28,55 G. The number of passengers carried had been 2,006,806; the number of animals 294,918. The expenditure on wages and victualling of crews had been £4,878,590. PROFIT - SHARING FOR EMPLOYEES. For some time Lord Indheape had sought to discover a scheme by which employees might, without risk, participate in the company's profits, and had hit on'a plan which he thought was both simple and practical. The Board had, therefore, announced that employees of the P. and O. and British India Companies might make deposits which would bear interest at 5 per cent, per annum with, in any year when the deferred dividend was 5 per cent, or over, an additional 2 per cent., or when the dividend was 10 per cent, or over an additional 2* jer cent. The directors felt that this would be an added incentive to employees, who had so much in their hands, to care for the company's interests, and while ensuring them a reasonable return on their deposits, would enable them to share with the stockholders the fruits of anything they, the employees, might do to improve the company's returns. The scheme would be open to all the employees of the allied companies. The chairman moved: "That a dividend for the half-year ended 30th September last of 2i per cent, on the preferred stock, less income tax, and a dividend of 4 per cent, on the deferred stock, free of income tax, be declared." A GREAT WORKER. Commenting on points in the speech, "The Morning Post" says:— "With his usual force and courage, Lord Inehcape again spoke some very straight words with' regard to the extent to which our industrial activities are handicapped by all kinds of Labour restrictions. We are always glad to give publicity to his remarks on thiß subject, because they come from one of itmr greatest workers, and one, moreover, who has worked his own way up to his present high position, and also because, mingled with his denunciations of the, slacker, is a keen appreciation of the value of the real worker, in however lowly a station."